Time consistency problems can arise when environmental taxes are employedto encourage firms to take irreversible abatement decisions. Setting a high carbontax, for instance, would induce firms to invest in low-carbon technology,yet once investment has occurred the government can then reduce the...

Proposals are often made to tax goods which are environmentally damaging. Manysuch goods are consumed both directly by households and industry at large: for example,carbon-intensive fuel, waste water or congested road space. This paper adopts a tax-reformsetting to evaluate such a policy. The...

This paper examines the impact of a major change in dividend taxation introduced in the UK in July1997. The reform was structured in such a way that the immediate impact fell almost entirely on thelargest investor class in the UK, namely pension funds. We analyse the behaviour of share...

Trade unions have been successful in compressing the wage distributionbut not in influencing the share of national income going to labour. This paperclaims that a compressed wage distribution provides insurance in the same way thatthe tax and benefit system does and thus may be...

This paper develops a formula for the optimal nonlinear income tax, the terms of which are familiar from the theory of linear income taxation. The development uses the idea of a perturbation of the optimal schedule and is based upon as assumption of differentiability. It is also shown that the...